Quiz 3

Output contract

obligates a buyer to purchase all of the output (production, manufactured goods) of a particular seller

requirements contract

obligates a seller to provide all the requirements for a buyer’s protection

What does the risk of loss depend on

whether the contract is a shipment or destination contract

True or False: an output contract is an agreement in which the buyer purchases all the production of the seller

True

True or False: A shipment contract means that the buyer must arrange for a carrier to pick up and transport goods

False. Shipment contract- seller must place goods in possession of a carrier and contract for transportation as is reasonable for the nature of goods and other circumstances

Ike’s Bikes sells motorcycles. Sam’s Used Cards & Cycles (Sam) sold Ike a used motorcycle. Ike believes the bike belonged to Sam’s since Sam produced papers that looked official. Sam stole the bike from Ted. Ike may:

sell the bike since he was a buyer in the ordinary course of business with good title

Ike is a buyer in ordinary course of business and gained good title because he bought the bike from Sam’s (a) in good faith and without knowledge that the sale to him was in violation of the ownership rights of a third party, and (b) bought goods in the ordinary course of business of a person selling goods of that kind

Pacific and BoxCo had a contract in which Pacific must provide all cardboard for BoxCo’s box production. This type of contract is known as a

requirements contract

strict liability

liability without (or regardless of) fault

foreign-natural test

food is considered unfit for ordinary purposes if an object is found in food that does not occur naturally.

True or False: Implied warranties are created by the seller’s conduct rather than express statements

False. Implied warranties are created by operation of law rather than seller’s express statements

True or False: Merchantability is that goods must be fit for the ordinary purposes for which such goods are used

True

True or False: a disclaimer is a clause in the sales contract in which a seller attempts to eliminate liability a seller might otherwise have under law

True

True or False: Under foreign-natural test, the defendant is liable if the object or substance is “foreign” to the product but not liable if it is “natural” to the product

True

Drew was injured when his car rolled over after the tires were delaminated and caused him to lose control. Drew could sue, claiming:

negligence (design or manufacture), strict liability, breach of warranty

non-conforming

not as described in the contract

True or False: Mutual mistakes may be remedied by reformation

True

True or False: Duress and undue influence have the same meaning

False. Unlike duress, pressure is exerted through persuasion rather than coercion in undue influence

Elements of innocent misrepresentation

False assertion and reasonable reliance on the assertion by complainant

If the assertion was knowingly made, the misrepresentation would be fraudulent rather than innocent

What is the product in the Social Dilemma?

Attention

capacity

the ability to incur legal obligations and acquire legal rights and duties

ratification

(express or implies by conduct) occurs when a person of majority age indicates they intend to be bound by a contract made while still a minor

Duties upon disaffirmance

each party has a duty to return to the other any consideration (money, goods) the other provided

if a contract is voidable due to mental impairment, a person may disaffirm it. However, ________, they can ratify the contract.

once they regain capacity

True or false: capacity is the ability to know the details of the legal rights in a contract

False. Capacity is the ability to incur legal obligations and acquire legal rights

True or false: Ratification is the actual signature on the written contract

False. Ratification occurs when a person who reaches majority age indicates hat they intend to be bound by a contract made while still a minor

True or false: Disaffirmance is the right to avoid a contract due to incapacity

true

True or false: A minor’s right to disaffirm a contract ends on the day the minor achieves the age of majority

False. The right ends within a “reasonable” time after the minor achieves the age of majority

True or false: Intoxicated persons are always allowed to disaffirm a contract

False. Intoxicated persons may disaffirm a contract only when it is so extreme that the person is unable to understand the nature of the bargaining process

True or false: Persons with a mental incapacity may diaffirm a contract but cannot ratify the contract

False. once the person regains capacity, they may ratify the contract

Contacts needed in writing (Statute of Frauds)

MY LEGS

Marriage
Year
Land
Executor
Goods
Suretyship

Uniform Electronic Transaction Act (UETA)

Email/Electronic Signatures

Types of Bailments

For Sole Benefit of the Bailor

For sole benefit of the Bailee

Bailments for mutual benefit

Bailments For sole benefit of the Bailee

the owner of the goods allows someone else to use them free of charge

Bailments for the Sole benefit of the Bailor

Bailee renders a service but does not receive a benefit in return

Bailments for mutual benefit

Both parties benefit from the transaction